Dialysis 1031 Exchange Properties

Essential, three-times-a-week care, leased to the two largest operators in the industry.

Dialysis clinics are about as essential as healthcare real estate gets. Patients with kidney failure typically need treatment three times a week, for life or until a transplant, and DaVita alone performs about 92,780 treatments a day in the United States.

For an exchange, that means a tenant that is hard to replace and a building that is expensive to move out of. It also means pricing that rewards careful reading, because many dialysis leases on the market are in their later years.

Start with your dates, then look at what is on the market today.

Why Dialysis Works for a 1031 Exchange

Two dominant tenants. DaVita operated 2,671 U.S. centers as of September 30, 2026 and is rated BB by S&P. Fresenius Medical Care treated 203,177 U.S. patients in 2,539 clinics as of June 30, 2026 and is rated BBB- by S&P and Baa3 by Moody’s, the lowest rungs of investment grade.

Sticky buildings. A clinic needs water treatment and reverse osmosis systems, plumbing at every chair and dedicated power, close to patients who come three times a week. Operators renew the locations that work.

Yield for term risk. Many dialysis listings have fewer years left on the lease, which is why their cap rates often run higher than other healthcare types. An exchanger who underwrites the clinic, not just the logo, can earn that extra yield.

A fit for mid-size exchanges. Dialysis properties typically sell in the low-to-mid millions, often all cash or with modest financing, which suits exchangers replacing a single investment property.

What to Check Before You Identify

Before you identify a dialysis property, find out how busy the clinic is, whether the parent company or a subsidiary guarantees the lease, and how many years remain. The industry is consolidating: Fresenius ran 3% fewer U.S. clinics in mid-2026 than a year earlier, and DaVita’s U.S. treatment volume fell 1.1% in 2025, so operators do close underperforming clinics, often when a lease ends. Pair a dialysis primary with a backup that has more term remaining.

Comparing a building to a DST? See when a DST makes sense, and when it doesn’t.

Questions Exchangers Ask

Is DaVita or Fresenius the better tenant? Fresenius carries investment-grade ratings and DaVita is just below, but the strength of the individual clinic and the guarantee often matter more than the parent’s rating.

Why are some dialysis cap rates so high? Usually because the lease is near its end. A short remaining term means more renewal risk, and buyers price that risk into the cap rate.

Sources: DaVita third quarter 2026 results; Fresenius Medical Care 2025 Form 20-F and second quarter 2026 results, S&P Global Ratings and Moody’s via Investment Grade Research. Pricing and lease term reflect listings tracked by Investment Grade Research and update automatically. This is general information, not tax, legal or investment advice.